SINOGRAPH Bureaucratic reforms to test Xi's
power By Francesco Sisci
In March, the date of the meeting of the
Chinese parliament, the National People's
Congress, China will launch its largest
administrative reform since 1998. Back then, the
number of ministries went from 70 to 44 - and
today the 44 are expected to be halved and
competences will be redistributed.
It is a
further step away from the legacy of Leninist
state administration, but more importantly it
signals a new phase of political restructuring and
could open a complex resolution of the long power
struggle in China. A recent stand-off about the
popular newspaper Southern Weekly is proof of how
complicated the situation now is.
No
detail is clear and set in stone yet, but
something like the following could happen. The
Ministry of Railways, which for 15
years managed to avoid
incorporation into the Ministry of Transport, will
be abolished, while the Ministries of Civil
Affairs, Labor, and perhaps even of Health will be
merged into one.
The powerful Ministry of
National Security, a sort of CIA and FBI created
decades ago as a Chinese version of the Soviet
KGB, will be degraded at least officially (but
forms count).
The Ministry of the
Environment is expected expand its powers, thanks
to many years of cooperation with foreign
countries that in turn have promoted its role
internationally and domestically.
Likely
to merge are the Academy of Science and the
Academy of Social Sciences, which today play very
different roles; one is a research center of
science and technology and the other is a kind of
super think tank for the government.
The
powerful Commission for the Economy and Reform,
which is now a super Ministry of Economy and
Industry, could disappear then reappear as a
commission for reform, with tasks including
administrative restructuring of the state.
The Central Bank, now a kind of technical
body under the supervision of a deputy prime
minister, should be promoted in rank and earning
power.
In addition, the bloated
state-owned enterprises, which until recently had
expanded their areas of interest and taken
everything they could get their hands on, will
face more pressure to focus on their core
businesses. This should create more opportunities
for private companies.
It is a huge
tectonic shift that should create greater
efficiency for the state and the market, but will
also create an army of malcontents. In fact, this
restructuring, to be announced at the end of the
plenary session of China's parliament (the NPC) in
mid-March, will mean a strong blow to the
bureaucracy, which could be left with half its
former number of seats, as ministries will be
halved.
Just 15 years ago, when China
dramatically cut back its bureaucracy under
then-president Jiang Zemin, the situation was very
different.
In 1998, Beijing had a sense of
anxiety about the inefficiency of the entire
apparatus of the state, starting with state-owned
enterprises. There was a sense of siege and a
pressing need for action when the Asian financial
crisis put Beijing in danger of collapse.
Meanwhile, the United States and the West seemed
invincible and strong, having recently defeated
the USSR.
Today all that has changed. The
US and Europe are still concentrating on how to
get out of the 2008 financial crisis. Asia has
been the locomotive of growth in recent years, and
due to their many privileges, the state-owned
enterprises are full of money. In theory, then,
China doesn't need to change anything and could
continue with the old formula.
In fact, the current leadership sees problems in the current system and wants to avoid bubbles of inefficiency that may expand and burst over five or 10 years. Already, the relatively inefficient state-owned enterprises (SOEs) are closing off the market to all but the themselves, and many ministries have no clear boundaries, which expands the bureaucracy and wastes time.
In reality, then, the pending
reforms are advance preparation, carried out cold
and with no alarm or terror, and it is a test of
how the Chinese ruling class can dominate the
domestic situation and the state apparatus - a
much greater challenge than in the past, when the
reforms were "forced" by the external environment.
Moreover, these reforms take place at a
strange moment of transfer of power. In late
March, President Hu Jintao and Premier Wen Jiabao
will give up their seats to Xi Jinping and Li
Keqiang, respectively, but the changes underway
are designed and driven jointly by the outgoing
and incoming teams.
This is very different
from 1998. Then, Jiang was able to push reforms
that were firmly in his power, and the previous
management team was physically out of the picture:
Deng Xiaoping died in 1997, and most of his
comrades in arms also departed the political
scene.
Furthermore, in recent speeches Xi
proved willing to continue and expand the changes,
and various signals increasingly suggest the
possibility of political reforms.
Xi seems
determined to build the "Chinese Dream" (like the
American one), which is a dream of prosperity for
the Chinese and peaceful development for China and
the world, as party theorist Zheng Bijian
explained in recent speeches.
To create
his Chinese dream, Xi, supported by Hu, needs a
lot of power and a lot of determination because
interest groups opposed to reforms are very
powerful. Bo Xilai, now coming to represent the
total of conservative forces in China, has been
defeated, but many of his former supporters are
still defending his ideas and their interest turf,
the old ministries and cash-rich SOEs. In
mid-March we'll see if and to what extent the
desire for change progresses.
In the
meantime the situation is far from clear. The
difficulty in handling a stand-off about official
censorship in the most liberal Chinese newspaper,
the Southern Weekly, whose editors went on strike
last week against a heavy-handed intervention,
proves the present difficulties.
Beijing
needs to bring the Southern Weekly into the fold
and gain the consensus of the journalists but also
it can't afford at this moment to forfeit all of
its tools of control over the media. But attaining
these delicate goals could prove difficult while
the most liberal leaders push for faster reforms
and the conservatives point at the strike as
evidence that things are getting out of control
and the present leadership may be losing its
foothold. This is a special test for Xi but also
for newly appointed Guangdong Party chief Hu
Chunhua, expected to become China's president in
2022. Beijing has to regain quickly full
control of the situation otherwise the plans for
administrative reforms could be disrupted. One way
seems to be the old tactic of diverting attention.
On Thursday, the official Xinhua news agency
announced that the case of former Chongqing Party
chief Bo Xilai "has been transferred to judicial
organs"; therefore his trial could be held in
February before the opening of the NPC.
This could focus attention internally,
showing that the real challenge to the present
leadership comes from the conservatives, and that
the liberals should not push too hard for fear of
rocking the boat. In the meantime the trial could
be also a warning shot against those who oppose
reforms, as their destiny could be in jeopardy if
they choose to associate closely to Bo's old
agenda.
It is a delicate balance act where
Hu Jintao and Xi Jinping are working apparently
closely together to define the political direction
of China for the next 20 years.
Francesco Sisci is a columnist
for the Italian daily Il Sole 24 Ore and can be
reached at fsisci@gmail.com
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